BusinessSteps Involved When Global Sourcing From China

Steps Involved When Global Sourcing From China

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Today, the entire world serves as one large market. It has become easy to purchase goods and services from foreign markets across boundaries. Global sourcing from China has several benefits and exposes your company to entirely new markets. In addition, you gain knowledge about how business is done around the world. Moreover, you will have access to resources and skills that are not immediately available in your nation.

Customers want businesses to deliver their products on time and to their satisfaction, and the only way to do this is to have a standardized and effective fulfilment process. If you own a small business, you could find it difficult to go for global sourcing from China which can be a major problem. However, there is a solution to every problem, and for this is a sourcing agent.

A sourcing agent is a person whose main responsibility is to track down manufacturers and suppliers who will live up to your expectations. Depending on your needs and whether they can find a solution to your problem, you can choose between an independent sourcing agent and or a sourcing agency. Agents from a sourcing firm or agency will have a wealth of resources and can offer you a very effective method of fulfilment. Whatever you chose, these sourcing agents can help you streamline your business process from start to finish.

Steps Included in Global Sourcing

However, even global sourcing from China is not an easy process. It relatively involves many things to make every process successful –

Plan a Layout

First, understand the product you are going to sell. Once you have decided on a certain product, it’s simpler to narrow down potential providers. If you have a plan, you will decide on the key elements, such as the raw material you want to use, how it will function, and even the colours. Make a detailed list of your anticipated outcomes in advance so that you are ready when you speak with a manufacturer or supplier.

Find a Supplier

The most important aspect of global sourcing from China is probably selecting a trustworthy supplier for your goods. China has a large supplier and manufacturer base since they have a lot of labour force and manpower. A bigger selection means you will have more options, but it also means you will have to spend more time considering potential candidates.

Simply surfing the internet and searching through Alibaba or GlobalSource will not be enough. You need to find someone who can produce a high-quality product according to your agreed-upon timeline while also adhering to your needs. Checking their license can help you determine whether they are a legitimate company or not, which is another important consideration. Even more crucial would be a factory audit after verifying the supplier and confirming that they adhere to national and international requirements.

Cost Incurred

Global sourcing from China can save you money, but only if you have accurately estimated the costs you will have to pay. Values are mostly influenced by the quality of the product because using higher-quality materials implies greater prices. When it comes to products created in China, you’ll get what you pay for. Don’t expect to get a high-quality item at an absurdly low price.

Along with production costs, you should also include money for unforeseen costs. Since it cannot be guaranteed that every product will run well, it is better to have an emergency fund.

Negotiate

If you’re not used to global sourcing from China, you must analyse the costs so you can decide how much to pay your supplier or manufacturer. The supplier and you don’t need to agree with the initial quotation, so you must negotiate to reach a price that both of you find suitable for pockets. It is good to be familiar with sourcing prices before you seek assistance from them to avoid scams.

Be wary if the provider tries to suddenly increase the price without providing any justification. The best way is to get everything in the written document so that supplier cannot make changes to the price in the middle of the manufacturing.

Quality Inspection

You can request a product sample before the actual production to determine whether the provider has a clear understanding of the requirements. If you’re not satisfied with a sample, you can request adjustments to your product. Internal audit is a crucial part of the process during real production. You can hire a company or sourcing agent to do internal checks to ensure that the provider adhered to your instructions.

In addition to providing internal inspection services, third parties also do pre-shipment inspections. They will send faulty products back to the manufacturer to be replaced if they are discovered before being transported. This helps in avoiding long delays which can occur after the faulty product reaches its destination.

Mistakes to Avoid When Sourcing from China 

You run a lot of risks with global sourcing from China because you’ll be dealing with foreign manufacturers. When dealing with them, you must be confident in your knowledge and abilities. Employing a sourcing agency will reduce those risks, but it’s still not a safe plan. To ensure that you receive value for your money and prevent being defrauded follow these simple tricks –

  • Research well about the manufacturer and the sourcing agent. This can be done by checking their legitimacy online and checking their licence and registrations.
  • Always look for supplier and sourcing agents that are experienced in their field and specializes in your product category. This way you will not have to brainstorm with them to get your product manufactured.
  • Never pay before confirming the legitimacy of both the agent and the manufacturer. Normally, you and the agent would have an agreed-upon payment plan, or they might start with a deposit and then charge the remaining amount after the services are rendered.
  • Not keeping a written contract is the biggest mistake you can make when employing a sourcing agent or Chinese supplier. The reason you should put your agreement in writing is to prevent any ambiguities if your procuring supplier or agent does not fulfil the terms of the contract.

China is considered the best sourcing country for its high-quality goods and cheap labour cost. If you’re looking for a Chinese supplier and can’t rely on the internet much, then seek help from a sourcing agent, who knows the China market well.

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